MUMBAI: The rupee on Friday breached the 44 level to touch a fresh 25-month high but closed stable at 44.10/11 against the US currency.
At the Interbank Foreign Exchange (Forex) market, the local unit opened lower at 44.22/23 a dollar from its previous close of 44.10/11 and touched the day's low of 44.25.
Dealers attributed initial fall in the rupee to dollar demand from some banks and importers.
But the rupee later bounced back to a fresh 25-1/2-month high of 43.97 on sustained capital inflows. It, however, concluded at yesterday's level of 44.10/11.
Keeping a watch on the record $22 billion FII investments in the booming Indian stock markets this year, the Reserve Bank today said it will "intervene if the inflows are lumpy and volatile".
Foreign Institutional Investors (FIIs), the main key player, were net buyers in equities to the tune of a record over $23 billion in 2010 till October 14, which mainly supported the rupee's rise.
Besides sustained capital inflows, a weak dollar overseas too aided the rupee sentiment in the later part of the day. The dollar index of six major currencies was down by 0.3 per cent in London today on hopes of further monetary policy easing by US Federal Reserve.
The Indian benchmark sensex today ended sharply lower by 372.59 points or 1.82 per cent, which later weighed on the rupee to end flat after touching a fresh 25-1/2-month high.
Meanwhile, the wholesale price index rose 8.62 per cent in September 2010 against 8.51 per cent in August, might forcing the apex bank to hike its short-term lending and borrowing rates at its next month's policy review.
Food inflation also inched up to 16.37 per cent for the week ended October 2, 2010 from 16.24 per cent in the previous week end.
Global crude oil was quoting below $83 a barrel in London today.
The rupee premium for the forward dollar closed lower on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in March ended slightly weak at 131-1/2 -133-1/2 paise from 132-1/2-134-1/2 paise on Thursday and far-forward maturing in September also settled down at 234-1/2 -236-1/2 paise from 237-1/2-239-1/2 paise previously.
The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.03 and the euro at Rs 61.95.
In cross-currency trade, the domestic unit declined against the pound sterling and the euro while held steady against the Japanese yen.
The rupee eased further to Rs 70.74/76 per pound sterling from Thursday's close of Rs 70.69/71 and softened against the euro to Rs 62.11/13 from Rs 62.08/10 previously.
It, however, ended stable against the yen at its previous closing level of Rs 54.34/36 per 100 yen.
Source : timesofindia.indiatimes.com